These are stories Report on Business is following Tuesday, March 25, 2014.
Chrystia and me
I feel I can write about this because Chrystia Freeland used to be my boss, and we used to drive into work together. I didn’t ban her from my minivan, so I don’t know where the Russians get off banning the newly-minted Liberal MP from Moscow.
Here are eight things the Russians could do instead to really hurt us:
1. Grant Rob Ford asylum. Canada couldn’t exist on the world stage without the Toronto mayor. No more late-night TV, no more shocker headlines around the world. And he looks a bit like Khrushchev when he’s smiling.
2. Send some oligarchs to buy up Vancouver real estate, and drive up house prices even more.
3. Give the PMO some tips on how to be more like the Kremlin. Oh, wait.
4. Pretend a Quebec referendum is just like a Crimea referendum.
5. Hold a job fair to lure Canadian workers to Siberia. Given this winter, they’ll never know the difference.
6. Entice Quebec to separate and join a currency union. The Canadian dollar’s down almost 5 per cent so far this year, but the ruble’s down 8 per cent. And Quebec could sure use the extra devaluation. (And that’s ruble, not rubble.)
7. Dump vodka on the Canadian market. Please.
8. Tell those of us who haven’t yet seen it how The Good Wife ends.
BRICS in focus
The bloc that’s supposed to be the emerging economic force is taking it on the chin. A look at where the BRICS group of nations stands today:
Brazil. Or, if it’s not careful, maybe the next Basket case. Here’s what Standard & Poor’s said yesterday as it cut its rating on Brazil to triple-B-minus: “The downgrade reflects the combination of fiscal slippage, the prospect that fiscal execution will remain weak amid subdued growth in the coming years, a constrained ability to adjust policy ahead of the October presidential elections, and some weakening in Brazil’s external accounts. Low growth prospects reflect both cyclical and structural factors, including investment as a share of GDP of only 18 per cent in 2013 and a slowdown in growth in the labour force.”
Russia, better known as Ruffian amid the Ukraine crisis. The world’s new pariah faces uncertain economic times with the threat of further sanctions. And, according to the Financial Times, the Kremlin faces a potential outflow of capital of $70-billion (U.S.) in the first quarter, which ends next week. It’s also being kicked out of the G8, which doesn’t matter in fact all that much because of the group’s waning influence, though it is a symbol. Said chief market analyst James Hughes of Alpari in London: “News of Russia’s move into a naval base at the weekend sparked more jitters, but further news yesterday that sanctions from the West could push Russia into a recession made many in the city believe that Russia may well look to cool off and halt its offensive, if not only temporarily.”
India, known lately as Inflation Central. The latest measure showed annual inflation slowing in February to the slowest pace in almost two years. Well, yes, but … it stands at 8.1 per cent as the country boasts Asia’s sharpest growth in consumer prices. Today, the country’s Election Commission asked the government to forgo a gas price hike until after the next election. Said Deven Choksey of Mumbai’s K.R. Choksey Securities, in an interview with Reuters: “It sends a very bad signal to the outside world. In this country, due to elections even the commercial decisions can be postponed.”.
China. Let’s say Chilly, as government and monetary officials try to meet their target of 7.5-per-cent economic growth. Here’s the view from senior economist Jennifer Lee of BMO Nesbitt Burns today: “Continued speculation of a stimulus package coming from China is driving stocks higher across the Atlantic, although I'm not 100-per-cent clear why such a package would be coming. China's officials appear to be guiding expectations lower, that is, having markets accept slightly lower-than-the-stated target growth rate of 7.5 per cent. The government cannot step in every time a couple of indicators suggest that growth is slowing.”
South Africa. Or Strike Central. It’s hard to say exactly what will happen given that this is a country rich in resources but hobbled by mining strikes. Just today, according to Reuters, in the midst of a two-month strike, three major platinum miners warned of the damage from the labour troubles: “Mines and shafts are becoming unviable; people are hungry; children are not going to school; businesses are closing and crime in the platinum belt is increasing.”
- Geoffrey York: Putin’s BRICS allies reject sanctions, condemn West’s ‘hostile language’
- Eric Reguly: Fresh worries on China growth as factories slow to 8-month low
- Brian Milner: China moves the economic goalposts
- Kim Mackrael in Politics Insider (for subscribers): Russia gets kicked out of a club whose prestige was waning anyway
- OECD forecasts emerging economies will hold back global recovery
- Europe and Russia have ‘a gun to each other’s head’ with oil as a weapon
- S.Africa platinum strike causing ‘irreparable’ damage: producers
CPPIB in China
And while we’re on the topic of the BRICS, the Canada Pension Plan Investment Board is moving into China’s property market.
The investment arm of the giant pension fund manager said today it struck a deal with China Vanke Co., China’s biggest real estate developer, and will put some $250-million (U.S.) into the market over time.
To start, the two are going into a project in Qingdao, in Shandong province, The Globe and Mail's Janet McFarland reports.
“The venture will focus on new residential development projects in large cities across China, where there are rising incomes and strong economic fundamentals,” CPPIB said in a statement today.
“It is expected that these factors will provide significant demand for middle income housing. Vanke will be responsible for sourcing projects for the venture.”
- Janet McFarland: CPPIB dives into turbo-charged China residential housing sector
- Eric Reguly: Investors worried about Ukraine miss the real problem: China
BlackBerry in BBM move
BlackBerry Ltd. today unveiled details of making money from its wildly popular BBM service, The Globe and Mail's Shane Dingman reports.
BlackBerry has been growing its messaging service at a torrid pace since it opened up BBM to iOS and Android smartphone users in October, 2013, recently surpassing the 85 million mark.
Today, it said it roll out a BBM Shop that will sell downloadable “virtual goods” such as stickers.
“At no point should monetization come at the expense of the user,” David Proulx, senior director of BBM Business Development, told reporters, adding there was no “one way” to monetize the service, and that the company would continue to experiment.
IATA urges overhaul of laws
Laws to punish unruly passenger behaviour aboard aircraft are inadequate and need to be beefed up as air rage and other dangerous incidents escalate, says the International Air Transport Association.
The trade group for the world’s major airlines is urging governments to close legal loopholes that allow disruptive passengers to escape law enforcement for serious offences committed on board commercial aircraft, The Globe and Mail's Bertrand Marotte writes.
“Reports of unruly behaviour are on the rise," said IATA director general Tony Tyler.
The Tokyo Convention covering this aspect of air travel was negotiated in 1963, mostly to address the threat of hijacking, and it needs to be updated, he said.
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